In theory, a body of 'canon' knowledge is good for any setting. You really need one if there's to be more than one writer. However, the Traveller canon has enough contradictions and broken parts that it can be used to argue all seven or eight sides of the same point... it really, really needs a good hard cleaning up.
The problem here is that a small but noisy (and sometimes downright aggressive) segment of the game's fans have so much emotional investment in 'their' game that they can't bear to see anything that contradicts their vision. And of course since there are conflicting opinions about which version of canon applies, and what interpretation is the right one, etc... well, it can get messy.
Related to this is the behaviour of a segment of the fan base, who don't actually write the game materials but can and will tell all and sundry how they should be/should have been done. Some of the hate mail I've had is quite staggering... and some of it was for quite trivial reasons.
Eg, when it was announced that I was writing for SJG's GURPS TRaveller line, some people who didn't like the idea of GURPS Traveller sent me some pretty unpleasant mail... and that was before I'd typed a word. The very concept of GURPS Traveller upset them, so they took it out on the prospective authors.
It's this sort of people who cause the real 'canon' issue. Most players can agree to differ and just play the game, which means that canon debates can be handled in a civlised manner. But then there's the sort who demand that I be murdered* because I wrote something that didn't match their vision of how the game's setting should be.
*Yes, really. And it was pointed out that saying this on an open list was a felony in the poster's own country. He was offered the chance to retract the statement, but instead said 'no, I mean it'.
Yup, this man wants me dead because I made some stuff up for a game.
That's the real problem with canon, not canon itself.
That, and the fact that the process of getting new products approved so that they fit with canon is both broken and riddled with politics.
In all, it's hardly surpising that nobody wants to jump into this 55-gallon-drum of worms.